Coal supply restored to PSPCL's power plants: Panem Coal Mines

Coal supplier Panem Coal Mines Ltd today said it has restored coal supply to three thermal power plants of Punjab power utility, giving the much needed relief to PSPCL facing demand and supply gap of power.
"PSPCL (Punjab State Power Corporation Ltd) has assured us that they will consider (our demands)...(coal) dispatches have been started (to PSPCL)," a senior official of Panem Coal Mines said today.
For uninterrupted supply of coal, the coal supplier was demanding price revision, clearance of outstanding dues, advance payment against railway freight and Rs 100 per tonne advance for coal supply from captive coal mine -- Pachwara coal block in Pakur district in Jharkhand.

Panem Coal Mines attributed the discontinuation of coal supplies to "financial constraints" faced by the project.
"...Because of financial constraints, the (coal) dispatches were discontinued. A huge amount of freight is to be paid. For a particular (coal) rake, it takes Rs 1 crore and that has to be paid in advance to railway. We shall have to pay and then PSPCL reimburses the payment (to us). Moreover, because of other reasons, project is located in isolated area. All these things caused financial problems," he said.
"...(coal purchase) agreement was signed a long time back. (since then) a lot of escalation of price (has taken place). Then transportation cost. Foreign exchange has become so costly. All (these factors) have added to financial problems," he said.

Coal supplies were suspended to PSPCL's three thermal power plants at Ropar, Bathinda and Lehra Mohabbat on April 11 by Panem, an official of PSPCL said.

Panem Coal Mines supplies 7 million tonnes of coal to PSPCL's thermal units, which accounts for 60 per cent of power utility's requirements.
Noting that financial situation of the project was "very bad", he, however, said the power utility PSPCL had assured to sympathetically look into this whole issue to resolve it at the earliest.
"Problems have been realised by PSPCL. They are showing positive outlook," official said while seeking anonymity.
PSPCL, formerly known as Punjab State Electricity Board, had entered into an agreement with Eastern Minerals & Trading Agency (EMTA) to form a JV company Panem Coal Mines for development and operation of a coal mine in 2001.

Power utility was allocated Pachwara coal block in Pakur district in Jharkhand state in 2002 and coal purchase agreement (CPA) was signed between PSEB and Panem in 2006.
Notably, PSPCL in a petition filed with power regulator has sought permission for buying 5,047 million units (MU) of short term power through competitive bidding in order to bridge the demand-supply gap during May till September.
In its petition, PSPCL pointed out that it could generate only 800 MW of power at its three own power plants at Ropar, Bathinda and Lehra Mohabbat because of suspension of coal supply by Panem Coal Mines.